Obesity remains a serious health problem and it is no secret that many people want to lose weight. Behavioral economists typically argue that “nudges” help individuals with various decisionmaking flaws to live longer, healthier, and better lives. In an article in the new issue of Regulation, Michael L. Marlow discusses how nudging by government differs from nudging by markets, and explains why market nudging is the more promising avenue for helping citizens to lose weight.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

The White House just released a report saying that good progress is being made [toward creating health insurance Exchanges] in 28 states. That begs the question, what about the other 22?

Writing in Kaiser Health News, Julie Appleby recently reported that that HHS has let just two contracts toward building the federal fallback exchanges. One is for $69 million to build the data hub so that federal agencies can share data with the exchanges–the IRS for example. The other contract is more directly related to building federal fallback exchanges, a $94 million contract.

But in their progress report today, the administration said that they have already advanced $729 million to the states for exchange construction––17 of those states receiving $1 million, or less. So, more than $700 million has gone to 33 states–and that is just federal money to date.

If the feds are going to be ready to launch 10 or 20 federal fallback exchanges these numbers just don’t compute. It is going to take a lot more than the $94 million HHS has contracted for to launch that many federal exchanges in the states that refuse to do so.

HHS says they will be ready. But they have been awfully secret over just how they are going to have lots of exchanges ready to go in 20 months. It is hard to see how that $94 million contract is more than just a down payment…

Right now, the numbers don’t compute–the number of states that could well not be ready, the federal money being spent by states that say they will offer exchanges, and the much less money HHS admits to be spending for those that will not be ready.

For the better part of a year, I have been urgingstates to refuse to implement ObamaCare, and to send any ObamaCare grants back to Washington, D.C.. In October, I was pleased to see the Heritage Foundation’s Ed Haislmaier call on states to do the same.

Late yesterday, Wisconsin Gov. Scott Walker (R) became the latest governor to heed that advice. Walker announced Wisconsin will return the $37 million “Early Innovator Grant” it received from the Obama administration under the health care law.

Wisconsin never should have accepted that money. Its purpose was to rope state officials into implementing a law that Walker himself described as “unprecedented,” “unconstitutional,” and jeopardizing “the foundational principle, enshrined in our Constitution, that the federal government is one of limited and enumerated powers.” Yet Walker accepted the Early Innovator Grant after Wisconsin joined the Florida v. HHS lawsuit, and after a federal district court declared the entire law unconstitutional and void.

Nevertheless, Walker did the right thing by joining the other two GOP governors who received Early Innovator Grants—Kansas Gov. Sam Brownback and Oklahoma Gov. Mary Fallin—in sending the money back. Walker’s move probably took no small amount of political courage, given how hard the health insurance industry and other ObamaCare profiteers—including prominent Republicans—have been lobbying states like Wisconsin to create an Exchange.

One of ObamaCare’s big selling points was that it would launch lots of pilot programs so that Medicare bureaucrats could learn how to reduce health care costs and improve the quality of care. Yesterday, the Congressional Budget Office threw cold water on the idea.

[The law’s] pilot programs involving bundled payments will provide physicians and hospitals with incentives to coordinate care for patients with chronic illnesses: keeping these patients healthy and preventing hospitalizations will be financially advantageous…And the secretary of health and human services (HHS) is empowered to expand successful pilot programs without the need for additional legislation.

The bill tests, for instance, a number of ways that federal insurers could pay for care. Medicare and Medicaid currently pay clinicians the same amount regardless of results. But there is a pilot program to increase payments for doctors who deliver high-quality care at lower cost, while reducing payments for those who deliver low-quality care at higher cost. There’s a program that would pay bonuses to hospitals that improve patient results after heart failure, pneumonia, and surgery. There’s a program that would impose financial penalties on institutions with high rates of infections transmitted by…

You get the idea.

The thing is, pilot programs in Medicare are not new. And in a review of dozens of Medicare pilot programs released yesterday, the Congressional Budget Office revealed they aren’t very successful, either:

In nearly every program, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered…

Only one of the four demonstrations of value-based payment has yielded significant savings for the Medicare program.

No big deal, you say. Startups fail all the time. What’s important is not that 37 startups failed, but that one succeeded.

That’s how things are supposed to work. But as Alain Enthoven explained to Gawande, the really perverse thing about Medicare pilot programs is that even the successful ones die:

Gawande got it wrong about pilots…The Medical Industrial Complex does not want such pilots and often strangles them in the crib. For example, nothing lasting and significant came of the pilot to reward people for getting their heart bypass surgery at regional centers of excellence. I don’t remember the details of how it died, but I believe it was tried and went nowhere. No doubt every hospital thought it was a center of excellence and wanted to be so rewarded.

Another more recent example is durable medical equipment. David Leonhardt had an excellent article in the New York Times on June 25, 2008 called “High Medicare Costs Courtesy of Congress.” Someone had sold the good idea that prices of durable medical equipment should be determined by competition, and there was a provision in law for pilots to test competition. The industry lobbied hard to stop it and promulgated scare stories. “Grandma won’t get her oxygen.” Leonhardt recounts how Democratic and Republican leaders got together and postponed the pilot— and, I suspect, postponed it forever. There were proposals to test health plan competition, fought off by the industry of course. So this is not a fertile political environment for pilots. In fact, one of the most important lessons that has come out of the current “reform” process is the enormous power of the medical industrial complex and their large financial contributions and armies of lobbyists to block any significant cost containment.

Rather than a reason for more government interference in health care, the death of these pilots is a consequence of government interference. If the federal Medicare program weren’t such an enormous player in the U.S. health care sector, industry lobbyists (and their servants in Congress) wouldn’t have so many ways to protect themselves from competition by more efficient providers.

Enthoven summed up ObamaCare’s approach to cost control best:

The American people are being deceived. We are being told that health expenditure must be curbed, therefore “reform is necessary.” But the bills in Congress, as Gawande acknowledges, do little or nothing to curb the expenditures. When the American people come to understand that “reform” was not followed by improvement, they are likely to be disappointed. Our anguish is only intensified by the fact that the Republicans are no better at fiscal responsibility, probably worse as they demagogue reasonable attempts to limit expenditures.

Congress is sending the world an unmistakable signal that it is unable or unwilling to control health expenditures and the fiscal deficit. That is not going to make it easier to sell Treasury bonds on international markets. I fear this will lead to higher interest rates.

Today Cato filed its second Supreme Court amicus brief in the Obamacare litigation, on the issue of whether the health care law’s Medicaid expansion is a proper exercise of the Constitution’s Spending Clause.

That is, states must now accept a comprehensive reorganization of Medicaid or forfeit all federal Medicaid funding—even though the spending power is circumscribed to preserve a distinction between what is local and what is national. If Congress is allowed to attach conditions to spending that the states cannot refuse in order to achieve an objective it could not outright mandate, the local/national distinction that is so central to federalism will be erased.

Joining the Center for Constitutional Jurisprudence, Pacific Legal Foundation, Rep. Denny Rehberg (chairman of the House Appropriations Subcommittee on Labor, Health & Human Services, Education, and Related Agencies), and Kansas Lt. Gov. Jeffrey Colyer (also a practicing physician) we argue that, in requiring states to accept onerous conditions on federal funds that it could not impose directly, the government has exceeded its enumerated powers and violated basic principles of federalism.

California is at risk of losing $25.6 billion in annual federal funding, for example, and together the states stand to lose more than a quarter trillion dollars annually. On average, states would have to increase their general revenue budgets by almost 40% in order to maintain their current level of Medicaid funding.

The 1987 case of South Dakota v. Dole, however, prohibits such a coercive use of the spending power and recognizes that “in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.’” Indeed, the states’ obligations, should they “choose” to accept federal funding and thus commit themselves to doing the government’s bidding, are far more substantial than those the Supreme Court invalidated in New York v. United States and Printz v. United States (which prohibit federal “commandeering” of state officials).

Moreover, the Congress that enacted the original Social Security Act, to which Medicare and Medicaid were added in the 1960s, recognized that social safety has always been the prerogative of the states and should continue to be done under state discretion. Medicaid itself was narrowly tailored to serve particularly needy groups.

In short, if Obamacare does not cross the line from valid “inducement” to unconstitutional “coercion,” nothing ever will. Just as the Commerce Clause is not an open-ended grant of power, the Spending Clause too has limits that must be enforced.

The Obamacare litigation has arrived on the big stage: the Supreme Court. The first opportunity for those opposing the legislation to weigh in comes on the issue that will be the last one the Court considers, “severability.” That is, if the individual mandate is struck down as unconstitutional, what (if any) of the rest of the law must fall with it?

On one hand, even in the absence of a severability clause, the Court should avoid striking down an entire law when only one small part is declared unconstitutional, particularly if the remainder of the law is unrelated to the defective bit (imagine an omnibus spending bill). On the other, the Court cannot go provision-by-provision and execute some sort of judicial line-item veto (creating a new law completely unrecognizable from what Congress enacted).

Many think that the rules in this area are unclear, but the analysis boils down to two questions:

Can the remainder “fully operate as law”?

Would Congress have passed the remainder?

In our brief, joined by the Texas Public Policy Foundation and co-authored by Prof. Richard Epstein, we examine these questions with a focus on Titles I and II of the law, which contain all the key provisions relating to Obamacare’s fundamental transformation of the national health care system: the requirement that insurers cover people with preexisting conditions (“guaranteed issue”), the requirement that premiums be assessed by a “community rating” formula, the creation of state insurance exchanges, Medicaid expansion, premium supports, etc.

Put simply, knocking out the individual mandate renders this whole package inoperable; the brave new health care world would not work as a matter of basic economic principle. As policy experiments in various states have proven, without an individual mandate, guaranteed-issue and community-rating provisions foster a “death spiral” because healthy people wait until they get sick or injured before buying under-priced insurance that they cannot then be refused, causing premiums to increase and costs to explode. The individual mandate is thus so interwoven with other crucial provisions that it cannot be excised without destroying the entire Obamacare structure.

Appreciating this mechanism, the government has conceded that guaranteed-issue and community-rating are indeed inextricably tied to the individual mandate—it has to, given its constitutional claim that the mandate is a necessary means of implementing a lawful regulation of interstate commerce. But a close analysis of the law reveals that the interoperability goes much further. And Congress knew this; there is no way it would have otherwise passed this law.

Thus, to aid the plaintiffs’ arguments regarding broader non-severability, our brief shows that the individual mandate is so central to the overall legislation that if it falls, those key Titles I and II must go with it.

The Court will consider the severability question for 90 minutes on March 28, the last of the three consecutive days it hears oral argument in the Obamacare cases.

The annual unveiling of its “Lie of the Year” award garners PolitiFact more attention than anything else. Hopefully, it will garner so much attention that people will recognize this award, which is supposed to improve political discourse, instead degrades it.

PolitiFact’s past three Lies of the Year have been about health care. Not one of them was a lie.

The third and latest Lie of the Year—that “Republicans voted to end Medicare”—is arguably true: its veracity depends on what your definition of “Medicare” is. To seniors, Medicare means “the government helps me pay for health care.” The House Republicans’ budget (a.k.a., the Ryan plan) would not end such federal assistance, and would arguably improve access to quality health care. To the Left, “Medicare” means the particular way the federal government helps seniors access health care: a single-payer system. The Ryan plan would end that single-payer system. My leftist friends are right and PolitiFact is wrong: from a certain and valid perspective, this claim is true.

Moreover, even if these three statements were false, the speakers believed them to be true. Therefore, they cannot be lies. Every single Lie of the Year award has gotten that basic fact wrong.

In the process, this award degrades political discourse by implicitly launching—an encouraging others to launch—ad hominem assaults on people who hold legitimate differences of opinion. PolitiFact should find a better way to attract readers.

I have been writing about the flaws in PolitiFact’s business model for some time:

In an action with major implications for health reform in Michigan, the state House has voted to turn down—at least for now—nearly $10 million in federal funds to create a statewide health exchange by 2014 to sell more affordable, standardized health insurance to consumers and small businesses.

The Michigan House’s action is consistent with what everyone from the American Legislative Exchange Council to the Heritage Foundation to the Cato Institute has recommended that states do: refuse to create an Exchange and send the money back to Washington.

Our friend Jack McHugh of the Mackinac Center for Public Policy writes:

Under the Michigan Constitution, no money can be spent by the state—including federal grant money—unless the Legislature passes an appropriation bill authorizing the spending…

House Republicans have shown no eagerness [to create a state Obamacare exchange], and that reluctance extended to this appropriation bill. In the colorful words of House Appropriations Chair Chuck Moss, R-Birmingham, to MIRS News, “They’d rather be caught sacrificing to Satan than voting for Obamacare, so that’s the way it is.”

Jonathan Adler and I explain in this Wall Street Journal oped how Michigan officials can protect Michigan employers (including the state government itself) from penalties under Obamacare’s employer mandate—and even help bring down the entire law—by refusing to create an Exchange.